May 29, 2017

The average curtailment rate among wind power facilities
across China remains a serious issue, at 17 percent, while full-year capacity
of the idling facilities stood at 49.7 billion kWh for 2016, according to data
from the China National Energy Administration.

Curtailment
rates in Gansu province, the Xinjiang Uygur Autonomous Region and
Jilin province were up to 43 percent, 38 percent and 30 percent last year,
respectively. The average across the country as a whole stood at 16 percent,
while the capacity of idling wind
power facilities reached 13.5 billion kWh in 1Q17.

The figures are astonishing. In fact, such high levels of
curtailment are not a one-off event. As early as 2011, curtailment across the
country had already reached 12.3 billion kWh, and the rate had already reached
16 percent. Since then, the level of under-utilization has only increased. For
the seven years in total, 150 billion kWh went unused, resulting in direct
financial losses of more than 80 billion yuan (approx. US$11.5
billion). Although China is not the sole country dealing with idling wind power
facilities, its wind sector is hobbled by the some of the world’s highest
levels of under-utilization.

To cope with the issue, China has rolled out a series of
measures since April 2010 including intensive surveys across the industry,
research reports from professional institutions and the adoption of supportive
policies by the energy authorities. However, the efforts have, to
date, hardly made a dent.

Based on the results from numerous surveys and studies,
power supply, power grid and load are three major factors leading to the vast
under-utilization of wind power facilities and PV systems.

Distribution of the
power sources is very uneven, with 77 percent of wind power facilities and 68
percent of the PV systems concentrated across China’s northern tier, yet the
energy mix across the region remains dominated by coal.

China’s power mechanism is the basic reason behind the
under-utilization issue. Traditionally, China’s planned economy included
management of the country’s power needs, with all aspects of power, including
coal-based electricity generation and transmission, well planned in advance.
This approach worked well before the emergence of wind power and PV
systems-based electricity.

Electricity generation
from wind and the PV systems that support it are subject to the
vagaries of the weather. As a result, output and the output schedule are fully
unpredictable. The planned economy that guides energy decisions in the country
is unsuitable for the management of wind power and PV systems.

Development of clean energy has become a priority
in China, in light of the high levels of air pollution that bedevil
the country, especially the country’s North. The entire power industry has
responded by starting to actively reduce under-utilization. Traditional fossil
fuel power plants and hydroelectric dams are making efforts to make
room for clean energy. The country expects to soon see the first signs of a
turnaround in dealing with the difficult issue of under-utilization.